The Volatility of Home Depot Share Prices Is 30% and That

question 61

Multiple Choice

The volatility of Home Depot share prices is 30% and that of General Motors shares is 30%.When I hold both stocks in my portfolio and the stocks' returns have a correlation of 1,the overall volatility of returns of the portfolio is:

• A)more than 30%.
• B)less than 30%.
• C)unchanged at 30%.
• D)zero.
• E)Cannot say for sure